Restoration of a dissolved British Virgin Islands (BVI) company. Arrangement of and support in court proceedings

The dissolution of a BVI company occurs either voluntarily (by decision of the shareholders and following a certain procedure) or automatically after the publication by the Registrar of Corporate Affairs of the relevant notice in the Gazette (where the company did not pay the renewal and government fees)*.

*Previously, this happened after 7 years of the company’s being struck off (for non-payment of the government fee). From 1 January 2023, new rules apply whereby the automatic dissolution occurs much quicker: a company is deemed dissolved on the date of publication of the official notice of it being struck off the register.

In accordance with the amendments to the BVI Business Companies Act, 2022 that came into force on 1 January 2023, in the case of an automatically dissolved company, an application for the restoration of the company to the register can be made to the Registrar by the company, its shareholder, creditor or liquidator. Such an application can be made within 5 years of the date of publication in the Gazette of the notice of the company’s strike-off (i.e. within 5 years of the date of its automatic dissolution). After the restoration of the company under this procedure, the company is deemed to have continued in existence as if it had not been struck off or dissolved.

These amendments to the law set a transitional period and special restoration conditions for companies struck off under the old rules. Companies that, as of 1 January 2023, had already been struck off the register, but not yet dissolved, remained in this status:

• until 30 June 2023 (i.e. they are deemed to be automatically dissolved since 1 July 2023);

or

• until the date on which they should have been dissolved after the expiration of the 7-year period of being struck off, if this date preceded 30 June 2023.

The restoration of such companies after their automatic dissolution (if there is a need to restore them) is now carried out in court in accordance with the new general period set for the restoration of companies – within 5 years from the date of their dissolution (this period used to be 10 years).

Furthermore, when restoring such a company (struck off from the Register as of 1 January 2023 and automatically dissolved by / after 30 June 2023), a USD 5 000 penalty must be paid (if the restoration application is filed by a creditor, former director, former shareholder or former liquidator of the company).

An application for restoration can be made by any of the following:

• the Attorney General or a representative of any other BVI competent authority;
• a creditor, former director, former member or former liquidator of the company;
• a person who but for the company’s dissolution would have been in a contractual relationship with the company;
• a person with a potential legal claim against the company;
• a manager or trustee of a pension fund established for the benefit of employees of the company; or
• any other person who can establish an interest in having the company restored to the register.

The court may restore a company and return the company’s property vested in the Crown, upon receipt of an application in the approved form, if it believes the restoration of the company to be just and fair, and provided that:

1. on the date of dissolution, the company was not carrying on business or in operation;
2. the purpose of restoration is:
   1. to initiate, continue or discontinue legal proceedings in the name of or against the company; or
   2. to make an application for the company’s property that has vested in the Crown as ownerless to be returned to the company; or
   3. in any other case not falling under the above paragraphs or in which application cannot be made to the Registrar, the court considers that, having regard to any particular circumstances, it is just and fair to restore the company to the register.

An automatically dissolved company* can be restored within 5 years of its dissolution date, with restoration procedure generally taking place out of court via a relevant application submitted to the Registrar.

*Here and below, we are referring to companies struck off after 1 January 2023 and automatically dissolved in accordance with the new rules.

Before 1 January 2023, the Registrar could restore a company (struck off but not yet dissolved) upon receipt of an application in the approved form, if the Registrar believed the restoration of the company to be fair and reasonable, and provided that:

1. the company has filed a copy of its register of directors;
2. the Registrar is satisfied that a licensed person has agreed to act as registered agent of the company (if the company has been struck off for not having a registered agent); and
3. the restoration fee as well as other outstanding fees and penalties have been paid.

From 1 January 2023, the Registrar has a wider authority to restore companies: the Registrar can now also restore dissolved companies**, provided that, in addition to the three criteria above, the Registrar is satisfied that:

1. the company was carrying on business or in operation at the date of its striking off and dissolution;
2. the registered agent has made a declaration in the approved form that the company’s records have been updated as required by the Business Companies Act; and
3. if, following the striking off and dissolution of the company, any property of the company has vested in the Crown as ownerless, the BVI Financial Secretary:

• has signified to the Registrar the Crown’s consent to the company’s restoration to the register; or
• has, within 7 days of receiving a request to give the Crown’s consent to the company’s restoration to the register, failed to respond to the request giving the Crown’s consent or refusing consent.

**Meaning companies that have been dissolved automatically.

***Local lawyers’ service fees as well as fees for ordering a company search and filing documents on the appointment of a new registered agent can be found in the “Fees” section.

Where:

1. the company was struck off the register and dissolved following the completion or termination of its voluntary liquidation under the Business Companies Act or liquidation under the Insolvency Act;
2. on the date of dissolution, the company was not carrying on business or in operation;
3. the purpose of restoration is:

• to initiate, continue or discontinue legal proceedings in the name of or against the company; or
• to make an application for the company’s property that has vested in the Crown as ownerless to be returned to the company; or
• in any other case not falling under the above paragraphs or in which application cannot be made to the Registrar, the court considers that, having regard to any particular circumstances, it is just and fair to restore the company to the register,

the authority to issue an order to restore the company lies solely with the court.

The restoration of a company after voluntary liquidation is only possible by making an application to the court within 5 years of the liquidation date*.

*This provision applies from 1 January 2023 (before the entry into force of these amendments, this period was 10 years).

The new rules, effective from 1 January 2023, set a broader list of those who can apply for the restoration of a liquidated company. Previously, an application for restoration could be made to the court by a creditor or a person who was a director, shareholder or liquidator of the company at the time of its liquidation, and also by any person that has a legitimate interest in having the company restored to the register. Now the list of persons who can apply to the court for the restoration of a liquidated company is as follows:

• the Attorney General or a representative of any other BVI competent authority;
• a creditor, former director, former shareholder or former liquidator of the company;
• a person who but for the company’s dissolution would have been in a contractual relationship with the company;
• a person with a potential legal claim against the company;
• a manager or trustee of a pension fund established for the benefit of employees of the company;
• any other person who can establish an interest in having the company restored to the register.

When making to the court an application for the restoration of the company, it is also necessary to serve notices of the application to:

• the Registrar of Corporate Affairs;
• the Financial Secretary; and
• the Financial Services Commission, if, at any time prior to its dissolution, the company was a regulated person.

As mentioned above, the purpose of restoring a voluntarily liquidated company is:

• to initiate, continue or discontinue legal proceedings in the name of or against the company; or
• to make an application for the company’s property that has vested in the Crown as ownerless (bona vacantia) to be returned to the company.

In order to prepare an application for the restoration of an automatically dissolved company, we will need the following information:

1. The applicant’s name and address;
2. The reason why the company’s renewal fees were not paid (if the company was automatically dissolved for non-payment of the annual fees);
3. The reasons why the company needs to be restored (for example, the company has assets or is owed receivables by other parties); the reasons will need to be supported by documentary evidence;
4. The company’s Memorandum and Articles of Association and Certificate of Incorporation (if not available, we can order duplicates from the Registrar);
5. Certified copies of the registers of directors and shareholders.

In order to restore a company automatically dissolved under the BVI Business Companies (Amendment) Act, 2022, we will need:

1. Certificate of Incorporation;
2. Memorandum and Articles of Association;
3. Proof of current status of the company (a search report from VIRRGIN would suffice);
4. Register of Directors;
5. Register of Members;
6. Proof of any assets owned by the company;
7. Letter of undertaking from a Registered Agent that said agent will be the registered agent of the company upon its restoration;
8. Registered Agent Declaration pursuant to Section 218A of the BVI Business Companies Act, 2004 (provided by us).

We will require originals or certified copies of the above. Original documents must bear original seals and or stamps by the issuing authority. Certification must be done by a notary public. If any document / certification is not in the English language it must be translated into English by a certified translator.

Further, we will require detailed instructions as to why the company was allowed to remain struck off for such a length of time and the reason(s) for restoring it to the register. In that vein, we ask that you provide us with the name and designation of the person who will depose to the affidavit in support of the application. We will require a certified copy of the applicant’s passport datapage and utility bill.

In order to restore a voluntarily liquidated company, we will need:

1. The applicant’s name and address;
2. The reasons why the company needs to be restored (for example, the company has assets or is owed receivables by other parties); the reasons will need to be supported by documentary evidence;
3. The company’s Memorandum and Articles of Association and Certificate of Incorporation (if not available, we can order duplicates from the Registrar);
4. Certified copies of the registers of directors and shareholders;
5. Copies of all documents that were filed with the authorities for the liquidation of the company (resolutions, Liquidation Plan, Articles of Dissolution, etc.);
6. The company’s Certificate of Dissolution (if not available, we can order a duplicate from the Registrar).

The first hearing is usually scheduled within 8 to 12 weeks of the date of application. If the application is not contested by the defendant, the order to restore the company is made at the same hearing. If the application is contested, the court may schedule another hearing and request additional documents and information. This will increase the timeframe by another 4 to 6 weeks and will create additional costs.

When the court decides to restore the company, a sealed copy of the court order is filed with the Registrar. The Registrar makes sure that the company satisfies all the conditions specified in the court order, after which the Registrar restores the company to the register with effect from the date and time that the copy of the order was filed and issues a Certificate of Restoration of the company.

A company restored to the register is deemed to have continued in existence as if it had not been dissolved or struck off. However, there is a point to note: in the case of the restoration of a company that was voluntarily liquidated under the BVI Business Companies Act or liquidated under the Insolvency Act, the company is restored as a company in liquidation, with appointment of a liquidator to continue and correctly complete the liquidation (a company may need to be restored, for example, if errors were made during the distribution of liquidation proceeds – the court will order the restoration of the company to correct the errors made).

The company will also need to comply with all the requirements of the law that may not have existed at the time of dissolution (file the register of directors, the register of beneficial owners, comply with economic substance requirements, etc.), which will create additional costs.

The application to restore the company to the register can be prepared for a professional fee of USD 9 500. This professional fee covers the drafting of the application (the initial draft and up to two revisions of the said draft) and court appearance (a single hearing which is usually enough if not contested). If the matter is contested or should matters become more time-consuming and or complex than anticipated, or involve more work than stated herein, our hourly rate will be applied accordingly.

Please also note that once we have commenced drafting the application, should you not wish to proceed further, it will attract professional fees of between 50-75% of the total professional fee quoted (depending on the stage of drafting) plus disbursements. The remaining 25-50% will be returned to your account.

If the application is unopposed, the court will make the order on the hearing date. If the application is opposed, the court will give directions for the filing of additional evidence and adjourn the matter. This may delay the process for another 4 to 6 weeks and increase costs.

Whilst we aim to provide the first draft of the application to you within 14 days of receipt of all required documents/information please note that various circumstances and the exigencies may necessitate a longer time period. Should the application be an urgent one, requiring urgent processing, drafting, filing and or appearance before the court it will incur an additional professional fee of USD 3 000. Please note the determination of whether an application is to be heard on an urgent basis is a judicial one and is not within our control.

The professional fees do not include disbursements, costs to the FSC, annual fees, penalties and registered agent fees.

For assets NOT exceeding USD 500 000 you can choose which division of the court to apply to:

1) The Civil Division of the High Court

The matter is usually set for hearing within 8 to 12 weeks of filing. FSC costs in the court proceedings are USD 1 000 – USD 1 500.

2) The Commercial Division of the High Court

The matter is usually set for hearing within 2 to 3 weeks. FSC costs in the court proceedings range between USD 1 500 and USD 3 000.

When the court decides to restore the company, a sealed copy of the court order is filed with the Registrar within 30 days of its making, failing which the order will become invalid.

The Registrar makes sure that the company satisfies all the conditions specified in the court order, after which the Registrar restores the company to the register with effect from the date and time that the copy of the order was filed and issues a Certificate of Restoration of the company.

Upon receipt of the court order the FSC (the Registrar) will proceed with restoration usually within 5 working days.

For automatically dissolved companies, the registered agent is deemed to have resigned as of date of dissolution. Restoration of such a company requires paying an extra fee for the appointment of a new registered agent. Within 3 days of restoration a registered agent (our firm) must be appointed.

Disbursements and Registered agent fees:

1. FSC costs in the court proceedings – from USD 1 000 to USD 1 500 in the Civil Division of the High Court and from USD 1 500 to USD 3 000 in the Commercial Division;
2. Search fees & filing fees for court documents – usually USD 200 – USD 350 (if the application is heard in the Civil Division of the High Court) and USD 500 – USD 700 (if the application is heard in the Commercial Division);
3. Registrar restoration fee – currently USD 2 500;
4. Special penalty for automatically dissolved companies – USD 5 000;
5. Fee for appointment of the registered agent – USD 720;
6. Annual fees and 50% penalty due to non-payment of annual fees;
7. Compliance fee – USD 250 for basic structure with 1 individual (please refer to the “Fees” section);

Upon restoration:

8. Registered agent and Registered address service (per month, starting from the month of appointment as Registered agent) – USD 100 per month;
9. ESA classification and reporting – USD 430 per year;
10. Filing the change of the company’s status with BVI BOSS System (filing of Beneficial owner’s data upon change of registered agent / other changes) – USD 185;
11. Annual report keeping (starting from 2023) – USD 320 per year.

*The fees are valid as at December 2024.

**It is the cost of obtaining one duplicate document.